“It seemed appropriate,” Simms says, and she should know. LAPADA and fellow trade body the British Antique Dealers’ Association have both spent many months preparing members for a seismic shift in the way the UK trades with its single biggest market – the European Union.
It is now two months since Britain departed that union, at the same time signing a trade deal on the new EU-UK trading relationship.
Stories of dealers encountering real difficulties with the new rules are not hard to find.
Paralysis
“Dealers felt panic caused by the EU-UK trade deal being signed at the last minute on December 24,” Simms says. “There was paralysis for a while in January, when some shippers and couriers stopped moving goods, waiting to see how journeys might pan out.”
It is still early days but what have the art market associations, professional service providers and dealers interviewed for this feature concluded about post-Brexit trade?
Freya Simms, chief executive, LAPADA.
Without exception, it is that new customs and VAT rules – including from July 1 a requirement to make declarations in advance – will make trade between the UK and the EU more difficult.
Clarity
The trade deal has at least brought clarity on how that flow of goods can continue. “It means art market firms can put in procedures for buying and selling, deciding whether they’ll absorb the extra costs themselves or push them on to the end consumer,” says Rudy Capildeo, partner at law firm Charles Russell Speechlys.
As for reducing trade barriers, however, the UK-EU accord is “largely a ‘no-deal’ Brexit for dealers and buyers in the UK, with bureaucracy and friction markedly increased,” Capildeo says. For one thing, UK-based dealers must quickly understand the new VAT ecosystem in the countries they sell to – a patchwork of import VAT rates ranging from 25% in Denmark, 10% in Italy to 5.5% in France.
“Our decision-making process is different now,” says antiquarian bookseller Daniel Crouch. A regular exhibitor at TEFAF Maastricht, Crouch says the range of items he brings to overseas fairs when they return in physical form is likely to reduce.
Collaboration
But for Crouch and others here’s the rub: the EU is too important a market to abandon.
Simms says that while it was “hard to move things” between the UK and the EU a few weeks ago, conversations with dealers are now about the practicalities of transacting once more with Europe.
To work through the thicket of new bureaucracy, collaboration is key. Last year, LAPADA applied for a ‘Brexit ready’ government grant to create a practical Q&A guide for members that it regularly updates and has opened up to dealers in general general by making it freely available via the lapada.org website.
Buyers at the Art & Antiques for Everyone fair: UK dealers have a strong supply relationship with the EU.
BADA, meanwhile, has partnered with art logistics consultancy Ossad Art Management for regular online clinics and a helpline to assist members in “navigating the complex world of customs procedures” in trading with the EU.
“The dealers sending or collecting goods by courier are probably on the steepest learning curve, whether for imports or exports,” says BADA secretary general Mark Dodgson. “It’s really important for them to work out which party in the transaction is paying for what and maybe let the EU customer know how much import VAT they will be in for.”
Man with van
The uniform advice is for dealers to embrace professional shippers or agents already familiar with customs rules and paperwork. So where does this leave the self-reliant trader-with-van?
“If you want to continue as man-with-van you need to understand the nuances and subtleties of customs processes and the practicalities of making declarations on HMRC systems CHIEF or CDS,” says Marco Forgione, the former chief executive of BADA who now leads the Institute of Export & International Trade.
In the meantime, Capildeo believes the UK could take a leaf out of France’s book and reduce export red tape. Then there’s the US example where import VAT has been abolished, though Capildeo is less confident of this happening, with the Covid-19 pandemic “not helping the government’s appetite to lower taxes as it tries to balance its books”.
Rudy Capildeo, partner at law firm Charles Russell Speechlys.
Perhaps the last word should go to a dealer who has already ventured into the thicket of new EU rules, emerging to tell the tale.
“Don’t be put off importing from and exporting to the EU,” says James Kaye of Butchoff Antiques. “Just be prepared to accept it will take longer for goods to get from one place to another and that it will cost you more for the privilege.”
For more on Brexit, see: The EU-UK trade deal: what it means for…
